Playing with ice: Small retailers fail to update Christmas contingency plans

Following subdued summer sales, and despite almost a third of those surveyed saying they are relying on Christmas to boost their annual takings, nearly half of respondents admitted they are not prepared to deal with interruptions to Christmas trading. In fact, only 14 per cent feel more prepared this year than last year for business interruption, and almost one in four say they have no business continuity plan in place at all.

At the same time, small retailers appear more vulnerable to business continuity threats this year than last year, as a result of cost-cutting during what remains a tough trading climate. A fifth of the retailers surveyed say they have consolidated suppliers to cut costs this year, with a third admitting to relying on just one or two key contractors. Around half of retailers are also concerned about supplier deliveries – likely as a result of their increased overreliance on just a handful of suppliers.

Tara Kneafsey, RSA’s SME Director, commented: “SMEs in the retail sector have been planning all year for a Christmas sales boost, and many are reliant on it for survival, but failing to prepare for business interruption could quickly undo all their hard work. Perhaps unsurprisingly, two thirds of respondents tell us they are worried about the weather affecting their business this Christmas, but regardless of this are failing to protect their livelihood through robust planning.

“Adverse weather can bring businesses to a halt, with damaged property or stock leaving it unable to function, so crossing your fingers and hoping for the best is just not enough. The importance of putting in place practical preventative measures should therefore not be underestimated – for instance, an up-to-date business continuity plan can make or break your business in times of crisis.”

A quarter of respondents admit they have not reviewed their business continuity plans at all this year – meaning these are likely to working from outdated plans, and that stock or equipment may be under-insured. Planning for the worst doesn’t need to be complex, though, and should match the specific needs of the business. These six simple steps can help ensure you have a workable ‘plan B’ should the worst happen:

Identify the key elements of the business. What are the critical processes and functions? Who are your key suppliers, customers, personnel? Do you have specific equipment or machinery that you can’t function without? What are your most profitable products or services?

Develop an impact analysis to determine how critical some of these core elements to your business are. For example, can your e-commerce business cope if your high street store is shut? Are you in a position to quickly hire temporary staff in the event of several people falling ill at the same time? Consider seasonal as well as more general business needs, such as higher stock levels needed in key trading periods.

Use this insight to develop your own business continuity plan. This should be divided into two parts; crisis management planning and recovery planning.

Your crisis management plan should include evacuation procedures, crucial information for the emergency services (e.g. site layout, location of hazardous substances), a list of essential contacts (e.g. suppliers, utility companies) and a pre-agreed communications path for keeping key stakeholders updated (e.g. staff, suppliers, financiers).

Your recovery plan should cover pre-planning of the resources available to your company in case of business interruption. This might include holding lists of temporary office or manufacturing space, a reciprocal agreement with another business to use their premises in case of emergency, or details of a third party supplier who can meet the needs of your customers on your behalf.

Once a Business Continuity Plan is in place, make sure you keep it up to date. Review it regularly – for example, are the emergency contact details listed still accurate, do you still work with the tradesmen you have on your list, or are there new ones to be added? Don’t forget to keep a copy off-site, too.